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FINAL REPORT 



of 



THE SELECT COMMITTEE 

on 

CROP INSURANCE 

1962 

WM. A. STEWART, M.P.P., 
Chairman. 



MEMBERS OF 
THE SELECT COMMITTEE ON CROP INSURANCE 

HON. WILLIAM A. STEWART, 

Chairman Middlesex North 

RHEAL BELISLE Nickel Belt 

RAY C. EDWARDS ., Wentworth 

R. V. GISBORN Wentworth East 

STANLEY L. HALL Halton 

J. MAURICE HAMILTON Renfrew North 

W. ERSKINE JOHNSTON Carleton 

PETER MANLEY Stormont 

RON K. McNEIL Elgin 

CLARKE T. ROLLINS Hastings East 

JOHN P. SPENCE Kent East 

A. ALEXANDER MACKENZIE York North 



G. R. BAGG Secretary to the Committee 

Appointed — April 12, 1960. 
Re-appointed — March 23, 1961. 
Report Dated — February 12, 1962. 

— 2 — 



TABLE OF CONTENTS 

Page 

LETTER OF TRANSMITTAL 4 

RECORD OF ACTIVITIES - 6 

SUMMARY OF INVESTIGATION 8 

FINAL OBSERVATIONS 9 

RECOMMENDATION 10 

TABLES: 

Appendix '*A" — Interim Report of the Committee dated 
January 1961 and presented 

March 23rd, 1961 11 

Appendix "B" — List of Witnesses - - 35 

Appendix ''C" — List of Contacts 36 

Table ''D" — Ontario Field Crops 37 

Table "E" — Tobacco Hail Rates in Ontario 39 

Table 'T" — Tobacco Hail Rates, continued 40 

Table ''G" — Crop Insurance in Ohio, U.S.A. 41 

Table "H" — Crop Insurance 10 Year History, U.S.A. - - - 42 

Table '1" — Crop Insurance Ontario - 1959 43 

Table ''J" — Crop Losses in Dover & Chatham, 1960 - - - 44 

Table ''K" — B.C. Fruit Growers' Premium & Losses - - - 46 

Table "L" — B.C. Fruit Growers' Mutual Hail Insurance 

Company Balance Sheet 47 

Table "M" — B.C. Fruit Growers' Mutual Hail Insurance 

Company Statement, December 31st, 1959 - - 48 



3 — 



LETTER OF TRANSMITTAL 

TO THE HONOURABLE 

THE LEGISLATIVE ASSEMBLY 
OF THE PROVINCE OF ONTARIO. 

HONOURABLE MEMBERS: 

The Select Committee on Crop Insurance was appointed on April 12, 
I960, by the Legislative Assembly of Ontario, "to enquire into all mat- 
ters relating to insurance of Agricultural crops produced in Ontario 
against hazards to those crops during the growing season" and without 
limiting the generality of the foregoing to enquire into the following 
matters: 



1. The hazards affecting each crop during the growing season, 
such as, hail, drought, frost, wind, excessive rainfall, flood, 
disease, insect pests, etc.; 

2. The annual losses sustained by the producers from each hazard; 

3. The insurance, if any, presently available for crop insurance 
in respect of each hazard; 

4. The rates charged or that might be charged for insurance 
against any or all hazards; 

5. The application of the Crop Insurance Act (Canada) to Ontario, 
or particular areas thereof, or in respect of particular crops 
or otherwise; 

And to make such recommendations as are deemed advisable with re- 
spect thereto; 

The Committee on Thursday, March 23rd, 1961, submitted an interim 
report to the Legislative Assembly in which it requested that it be re- 
appointed for another term to continue and complete its investigation. 
This request was granted. 



This Committee having now completed its assignment respectfully 
submits the unanimous report which follows: 



SIGNED: 




William A. Stewart - Chairman 



Rhcal Belisla Stani^L. Hall 

Maurice Hamilton Ray C. Edwards 




R. K. McNeil 
W. Erskine Johnston / / 

C. T. Rollins A. A. Mackenzie ^ P«t«'' Manley ^ 



Dated at Toronto, this 12th day of February, 1962. 



RECORD OF ACTIVITIES 



Subsequent to its reappointment in January 1961, the Committee 
held a meeting to determine the direction of its further investigations. 
After some discussion it was agreed that several meetings should be 
held throughout rural Ontario including the eastern and northern sec- 
tions in order that the farmers of those areas might have an opportunity 
to express their opinions on Crop Insurance to the Committee. 



Meetings v^ere accordingly arranged and held in Belleville, Kempt- 
ville. New Liskeard and Markdale. These meetings were advertised in 
th local press and on the local radio and all farmers in the area were 
invited to attend. In addition, personal invitations to attend were for- 
warded to officers of local Federation of Agriculture, Farmers' Union, 
Soil and Crop Improvement Association, and Junior Farmer organizations 
of the counties in the area in which each meeting was being held. 



On October 17, 1961, a meeting was held in Belleville and 10 farmers 
were present. Considerable discussion took place and Mr. Clarence 
Graham representing the Ontario Farmers' Union presented a short brief 
to the Committee. It was agreed by the Committee and those who were 
present that the limited attendance at the meeing was an indication of 
the lack of interest by farmers of the area in Crop Insurance. 



On October 18, 1961, a meeting to cover the eastern Ontario area 
was held at Kemptville, Ontario and 12 farmers were in attendance. 
After considerable discussion it appeared that most of the farmers of 
the area practiced mixed farming and were not dependent upon one or 
two crops for a major part of their income. It also was established 
that there had not been a serious crop failure in the area for many 
years. For this reason it appeared to be doubtful if many farmers 
would purchase crop insurance if it were made available by a govern- 
ment agency. 



On October 27, 1961, an open meeting of the committee was held 
at Markdale, Ontario, and only 5 farmers were present. The discussion 
that followed established that there was very little interest in crop insur- 

— 6 — 



ance shown by farmers of that area. It was, however, requested that 
the government should consider establishing an emergency fund that 
would be available to assist individual farmers or farmers of a speci- 
fied area who suffered a disaster that resulted in a complete loss of 
their crops. 



On October 31, 1961, a meeting was held at New Liskeard, Ontario 
with approximately 15 farmers in attendance. Mr. Robert Rice, a farmer, 
presented a brief to the Committee on behalf of those present. This 
brief stated that crop failures were very seldom experienced by the 
farmers of that area as the majority of them practised mixed farming, 
and expressed the opinion that few would make use of Crop Insurance 
if it were made available in the district. The brief further stated that 
these farmers supported the principle of a government sponsored Crop 
Insurance Plan for those farmers of Western Canada and cash crop 
areas in Eastern Canada whose income was dependent upon crops alone 
but they did not feel that it would apply in the mixed farming areas 
of Ontario. 



^ 7 



SUMMARY OF INVESTIGATION 



The terms of reference items 1 and 2 instructed the Committee 
to enquire into the hazards affecting agricultural crops in Ontario dur- 
ing the growing season and the annual losses sustained by the producers 
from each hazard. Several farm organizations including the Federation 
of Agriculture for Ontario and the Statistics Division of the Farm Eco- 
nomics and Statistics Branch of the Ontario Department of Agriculture 
were contacted and requested to provide information regarding the 
annual losses that have been sustained in past years by the producers 
of agricultural crops in Ontario from each individual hazard. None 
of these sources was able to provide this information and the Committee 
is satisfied that it is not possible to obtain it at this time. 



The terms of reference items 3 and 4 required the Committee to 
investigate the insurance presently available for agricultural crops in 
Ontario and the rates that are charged or might be charged for insurance 
against any or all hazards. This information is recorded in Table "E" 
and Table "F" of this report and further references to it are contained 
throughout the interim report. 



The application of the Crop Insurance Act (Canada) to Ontario or 
particular areas thereof is dealt with in the final paragraph on page 34 
of the Interim Report and is also covered in several observations recorded 
elsew^here in this report. 



^ S 



FINAL OBSERVATIONS 



(1) A large majority of Ontario farmers practice mixed farming, grow 
several crops and raise or finish livestock from which they receive 
diversified income. For this reason they are not dependent on the 
income from a single crop and it is doubtful if a significant number 
of them would purchase the Crop Insurance that could be made avail- 
able to them under the Federal Act Bill C-66. 



(2) Farmers in Ontario who grow cash crops such as fruit, tobacco, beans, 
etc., are interested in Crop Insurance but only in Crop Insurance 
that provides "spot loss" coverage. This type of insurance cannot 
be provided by a province operating under the provisions of the 
Federal Bill C-66 but is now offered to Ontario farmers by private 
insurance companies. 



(3) On several occasions it was suggested to the Committee that an 
emergency fund should be established to assist individual farmers 
or farmers of a specified area who suffered a disaster to crops. It 
is, however, noted by the Committee that in the past when a disaster 
of major importance struck an area in Ontario and a serious crop 
loss was sustained that the Ontario government had usually provided 
assistance to the farmers of that area by the method of establishing 
a reUef fund by matching dollar for dollar with the county involved. 



^ 9 — 



RECOMMENDATION 

In accordance with the terms of reference this Committee unanimously 
recommends that the Ontario Legislature take no action at the present 
time to establish a government agency to administer Crop Insurance in 
Ontario. 



— 10 — 



INTERIM REPORT 



of 



ONTARIO SELECT COMMITTEE 



on 



CROP INSURANCE 



March 23, 1961. 



11 



TO THE HONOURABLE 

THE LEGISLATIVE ASSEMBLY 
OF THE PROVINCE OF ONTARIO. 

HONOURABLE MEMBERS: 

On April 12th, 1960, the Legislative Assembly of Ontario appointed 
a Select Committee "to enquire into all matters relating to insurance of 
agricultural crops produced in Ontario against hazards to those crops 
during the growing season," and, without limiting the generality of the 
foregoing, to enquire into the following matters: 



1. The hazards affecting each crop during the growing season, such 
as, hail, drought, frost, wind, excessive rainfall, flood, disease, 
insect pests, etc.; 



2. The annual losses sustained by the producers from each hazard; 



3. The insurance, if any, presently available for crop insurance in 
respect of each hazard; 



4. The rates charged or that might be charged for insurance against 
any or all hazards; 



5. The application of the Crop Insurance Act (Canada) to Ontario, 
or particular areas thereof, or in respect of particular crops or 
otherwise; 



— 12 — 



And to make such recommendations as are deemed advisable with respect 
thereto; 



This Committee has not yet completed its assignment, but hereby sub- 
mits an interim report and begs leave to be reconstituted for another 
term: 



SIGNED: 

WM. A. STEWART, Chairman 
RHEAL BELISLE 
STANLEY L. HALL 
MAURICE HAMILTON 
RAY C. EDWARDS 
JOHN P. SPENCE 
REG. GISBORN 
W. ERSKINE JOHNSTON 
R. K. McNeil 
C. T. ROLLINS 
A. A. MACKENZIE 
PETER MANLEY 



13 



TABLE OF CONTENTS 

Page 

FOREWORD 15 

ACKNOWLEDGEMENTS - - 19 

RECORD OF ACTIVITIES 21 

GENERAL OBSERVATIONS AND CONCLUSIONS ... - 29 

TABLES: 

Appendix ''B" — List of Witnesses - - 35 

Appendix "C" — List of Contacts 36 

Table "D" — Ontario Field Crops ------- 37 

Table "E" — Tobacco Hail Rates in Ontario 39 

Table "F" — Tobacco Hail Rates, continued 40 

Table "G" — Crop Insurance in Ohio, U.S.A. 41 

Table "H" — Crop Insurance 10 Year History, U.S.A. - - - 42 

Table "I" — Crop Insurance Ontario - 1959 43 

Table "J" — Crop Losses in Dover & Chatham, 1960 - - - 44 

Table "K" — B.C. Fruit Growers' Premium & Losses - - - 46 

Table "L" — B.C. Fruit Growers' Mutual Hail Insurance 

Company Balance Sheet 47 

Table "M" — B.C. Fruit Growers' Mutual Hail Insurance 

Company Statement, December 31st, 1959 - - 48 



— 14 



FOREWORD 



In Ontario at the present time there are approximately 120,000 farm- 
ers. Most of these farmers are producing crops of one kind or another 
which may be marketed as cash crops, or may be fed to livestock to 
eventually produce dairy, poultry or meat products. To produce these 
crops each individual farmer must contribute an actual real investment 
in land, labour, machinery, fertilizer, seed, etc. The amount of the in- 
vestment, of course, varies greatly between individual crops and to a 
lesser extent between individual farmers producing the same crop. The 
problem faced by each farmer which is a real source of worry to him is 
that after he has done his best, he is still at the mercy of fortune or the 
elements. While the risk of total or substantial crop failure is not large, 
and while it varies from one farming area to another, the best and the 
poorest cropping efforts are subject to hazards that could bring total 
failure. 

It may also be pointed out that it is not only the individual farmer 
who carries the risk of financial loss. Each farmer is part of a com- 
munity which has as its centre a town or village. Most of the business 
enterprises in each of these towns are mainly dependent upon the pur- 
chasing power of the farmers in the ara. Thus a major or minor crop 
failure, or even the unexpected loss of a crop, by one individual farmer, 
is reflected and adversely affects a business account in the local elevator, 
store or bank. 

Whenever an individual or a Corporation invests money it assumes 
a risk of a loss of the investment. The risk is much the same whether 
the investment is in a car, a building, goods to be sold, or even life. 
Our society has, over a period of years, developed a means of protecting 
those who face these common risks. This device is insurance, by which 
a number of individuals or companies share this risk by each contributing 
a levy or premium to establish a common fund, which is available to 
reimburse contributors in the event of misfortune or disaster. 



Because it is difficult to establish a sound basis for measuring the 
risks involved in the production of crops, and because there is always a 
threat that an area-wide disaster might present a serious financial drain 
on the resources of an individual company, private insurance companies 
have been somewhat slow in developing and offering a comprehensive 
crop insurance program to farmers. In addition, most of the insurance 

— 15 — 



offered by private insurance companies to farmers in Canada and the 
United States covers only the risks of hail and frost. 



In 1939, the government of the United States of America estabhshed 
a Federal Crop Insurance Corporation, an agency of the United States 
Department of Agriculture. This Corporation has offered to farmers a 
type of insurance that is not available from private insurance companies. 
This insurance generally, but v^ith some exceptions, covers unavoidable 
loss of production due to drought, excessive rain, floods, hail, wind, 
hurricane, tornado, frosts, freeze, winterkill, snow, lightning, fire, earth- 
quake, wild life, insect infestation, plant diseases and any other unavoid- 
able cause of loss, due to adverse weather conditions. It does not cover 
causes of loss due to neglect, poor farming practices or theft. It should 
be noted that this insurance covers loss of production only, and does 
not cover financial losses due to low prices. The insurance is voluntary 
and the farmers pay a premium for this protection. The premiums are 
required to be set at a level believed adequate to cover losses and to 
provide a reserve against unforeseen losses. Operation costs have been 
borne by the government in the United States of America through annual 
appropriations and thus costs have not been included in the premiums 
the farmers pay. 



This crop insurance program in its early years underwent consider- 
able difficulties and suffered heavy losses in indemnity payments. To 
protect itself, the Corporation sought to expand its area of coverage in 
order to diversify its risks, and it has cut from its program any areas 
of real bad risks and no longer allows farmers to wait until risk con- 
ditions occur before they acquire insurance. Policies have a face value 
ranging from 40% to 60% of the harvest the farmer would normally expect 
to reap. Premium rates paid range from 2c to 35c per $1.00 of coverage 
and are determined by past records of losses and crop damage in the 
Counties where the insurance is written. 



On June 29th, 1959, the Federal Agricultural Minister, Mr. Harkness, 
introduced a crop insurance plan in Canada. Because of the limitations 
under the British North America Act, the Government of Canada is con- 
stitutionally unable to provide crop insurance directly. If a Province will 
agree to sponsor a plan, the Federal Government has offered to pay half 

— 16 — 



of the administrative costs and to reimburse the Province with that por- 
tion of the farmers' premium which the Provincial Government may 
pay up to 20%, as set out in item 4 (1) of the Federal Crop Insur- 
ance Act: 



'4 (1) The contribution payable to a province under an agreement 
shall be paid in respect of each year and shall be the total of 

(a) fifty per cent of the expenses incurred by the province in that 
year in the administration of the insurance scheme; and 

(b) if the province has by the agreement undertaken to pay a 
share of the premiums, the lesser of 

(i) the amount required to re-imburse the province for the 
share of the premiums paid by it in that year, or 

(ii) twenty per cent of the premiums paid in respect of 
policies of insurance in that year." 



The Federal Government has also agreed to provide loans to any 
province faced with heavy runs on the insurance fund, as set out in item 
4 (2) of the Federal Crop Insurance Act: 

''(2) The loans that may be made to a province under an agree- 
ment shall not exceed in any year seventy-five per cent of 
the amount by which the indemnities required to be paid under 
policies of insurance exceed the aggregate of 

(a) the premium receipts for that year, 

(b) the reserve for the payment of indemnities, and 

(c) two hundred thousand dollars." 



The crop insurance that can be offered under this Federal plan 
must be on a ''unit" basis which means that a farmer must be prepared 
to insure all of the specific crop in which he has 100% interest as one 
unit. The amount of the insurance to be effected on that crop shall not 
exceed 60% of the long-term average yield of the crop in the area. This 

— 17 — 



insurance, like the Federal Crop Insurance Corporation coverage in the 
United States would cover all normal risks, except losses due to neglect 
or poor farming practices and the loss for the complete unit would have 
to exceed 40<^c of the long-term average production of the crop for that 
area before a claim would be valid. 



The Province of Manitoba has already moved to take advantage of 
the P^deral assistance and on August 4th, 1959, passed an Act to estab- 
lish a Crop Insurance Program in that Province. For the past year the 
program has been operated on a test area basis with premium rates cal- 
culated against the history of crop yield for each specified area. These 
premium rates also correspond closely to the rates set by the United 
States Crop Insurance Corporation for comparable areas just across the 
border from Manitoba. As of October 18, 1960, the harvest was almost 
completed in Manitoba and the Crop Insurance Agency has had a very 
successful year. It was reported that approximately 2,500 farmers bought 
insurance and there have been less than 150 claims. They do not offer 
an all-risk policy, but do cover risks such as drought, flood, excessive rain- 
fall, insect pests and disease. Although the coverage for 1960 in Manitoba 
was mainly for Spring Wheat the agency is now investigating and calcu- 
lating coverage rates for sugar beets and is considering offering insurance 
as a package proposition for Wheat, Oats, Barley and Flax, as well as 
separately by individual crops. The Province of Saskatchewan has also 
passed a Crop Insurance Act and may be operating in 1961. British 
Columbia is also investigating Crop Insurance, especially as it might 
apply to the fruit industry. 



— 18 — 



ACKNOWLEDGEMENTS 



In the course of this investigation the Committee held several meet- 
ings, received submissions from many delegates and organizations, and 
interviewed many individuals. The members of the Committee were 
very much impressed by the briefs presented. 



The Minister of Agriculture, the Honourable W. A. Goodfellow, was 
most gracious in providing the assistance and co-operation of his staff. 
The Committee is especially grateful to the Deputy Minister, Dr. C. D. 
Graham, who contributed sound counsel and advice, and to Dr. H. L. 
Patterson, Director of Farm Economics, who addressed the Committee 
on two separate occasions, and was also the source of valuable inform- 
ation. A special tribute should also be given to Professor A. C. Robertson 
of the Ontario Agricultural College, Guelph, Ontario, who was inter- 
viewed by the Committee and discussed the manner that crop insurance 
might affect the availability of credit to Ontario farmers. Also provid- 
ing assistance were Mr. S. S. Symonds, the Chief Statistician, Depart- 
ment of Agriculture; Mr. Ken Lantz, Director of the Extension Branch; 
and Mr. E. A. Western, Manager of the Junior Farmer Loan Corporation. 



The Committee also owes a debt of gratitude to Mr. S. B. Williams, 
Director of Administration, Department of Agriculture, Canada. Mr. 
Williams travelled from Ottawa to Toronto on Sept. 19th to explain the 
manner in which Bill C-66, the Federal Crop Insurance Act, would apply 
to the Provinces, and how it might operate under Ontario conditions. 



The Committee travelled to the U.S.A. on two occasions. On Sept. 
27th, they visited the State of Ohio and were welcomed by Mr. Earl Wilson, 
State Director of the Federal Crop Insurance Corporation. 



Mr. Wilson organized a very interesting and informative programme 
and provided the Committee with valuable information concerning the 
operation and administration of crop insurance in that State. The Com- 
mittee was also taken on a tour and visited many Ohio farms. In each 
case the owner of these farms was most courteous to the group and dis- 



19 



played great patience in answering the multitude of questions that were 
presented by members of the Committee. 



On October 19th the members of the Committee travelled to East 
Lansing, Michigan, and were received by the Michigan State Agricultural 
College, represented by Dr. N. P. Ralston and Prof. Robert J. Bevins. 
They were again provided with an opportunity to visit many excellent 
farms and discuss the matter of crop insurance with the owners of those 
farms and representatives of the State Insurance Corporation. In ad- 
dition, the group was welcomed by Mr. R. L. Donovan, President; Mr. 
F. M. Hector, Secretary of the Michigan Mutual Hail Insurance Company, 
and Mr. Wm. McGee of the Michigan State Insurance Commission, who 
discussed and explained crop insurance as provided and administered by 
private insurance companies in the State of Michigan. 



Finally, the Committee would like to acknowledge the assistance of 
stenographers, Mrs. Teresa Walsh and Miss C. E. Taylor, who assisted at 
the meetings and prepared the minutes. In addition, a valuable contri- 
bution was provided by the Secretary, Mr. G. R. Bagg, who arranged the 
meetings and the Inspection Tours, organized the material that accumu- 
lated, and assisted in the preparation of the report. 



— 20 



RECORD OF ACTIVITIES 

The Select Committee on Crop Insurance was constituted by the 
Ontario Legislature on April 12th, 1960, on a motion by the Honourable 
Leslie M. Frost, Q.C., Prime Minister of Ontario. 

The first meeting of the Committee was held in Toronto on June 
16th, 1960, and all members were in attendance. This was mainly an 
organizational meeting to acquaint the members of the Committee with 
the problem at hand and to discuss the basis on which the Committee 
would operate. As a result of this meeting an advertisement, which 
recorded the formation of the Committee and which invited submissions 
on crop insurance from all interested parties, was inserted in all daily 
and weekly newspapers in Ontario. Letters were also sent out to all 
insurance companies which offered crop insurance coverage in Ontario 
and to all farm organizations, associations and marketing boards, which, 
in the opinion of the Committee, might have an interest in crop insur- 
ance. A complete list of these is contained in Appendix "A" and "B". 

Many organizations accepted the invitation, as outlined in the ad- 
vertisement, submitted briefs and appeared before the Committee. Let- 
ters and opinions were also received from individuals who could not 
make an appearance before the Board. Meetings to receive these dele- 
gates were held in Toronto on September 19th and 20th, 1960, and again 
on October 18th, 1960. In addition to submitting these prepared briefs 
the delegates who appeared at the above meetings answered many ques- 
tions presented by members of the Committee, and supplied helpful in- 
formation and opinions on the matter of crop insurance in Ontario. 

In order to obtain first-hand knowledge of the problem and to study 
the administration of an actual crop insurance agency, tha Committee 
on September 26th, 27th and 28th, 1960, travelled to the State of Ohio. 
The Committee visited the offices of the State Crop Insurance Corpor- 
ation and studied in detail the organization and administration of the 
Government sponsored Crop Insurance Plan as applied to the State of 
Ohio. The Committee was impressed by the high calibre of the State 
Corporation Officials, by their grasp of the problem involved, and the 
efficient manner in which the Corporation was operated. 

Mr. Earl Wilson, the area Director for the State of Ohio, outlined 
the manner in which his organization administered crop insurance in 

— 21 — 



that State. He advised that the Corporation was directed from Washing- 
ton and the Federal Office consisted of the National Manager, Assistant 
Manager and the following divisional heads: Underwriting, Administration, 
Budget and Finance, Sales and Service, Claims and Audit. There are 
four area Directors in the nation, under the supervision of the Washing- 
ton Office, who perform liaison duties between the field and the Head- 
quarters Office. There are twenty-one State Offices in the nation serving 
thirty-eight states. The state office includes the State Director, Office 
Manager and Office Staff, District Directors and Supervisors, Agents, 
Fieldmen and Adjusters. The State Director's duties are the over-all 
administration and promotion of crop insurance within his state or states. 



The District Director's primary duties are selecting and training field 
personnel, promotion of crop insurance, and public relations. Each Dis- 
trict Director usually has charge of ten to fourteen counties. He may 
have one or two Supervisors to assist with sales, service and loss adjust- 
ment. All employees of the Corporation, both full and part-time, are 
salaried. County fieldmen and adjusters are usually employed only part- 
time, depending upon the seasonal work load. 



Although agents are representatives of the Corporation, they are 
considered as self-employed. There are three types of agents. Regular 
agents are in charge of promoting, selling and servicing in the county 
in which they operate; they are paid a base figure per crop insured each 
year, plus a commission on the premium collected. Commission agents 
perform only sales work on a straight commission basis. Service agents 
perform the clerical duties of a county office, and provide an office 
for a contact-service point in the county; they are paid a fixed com- 
mission per month. Fieldmen perform sales and service work when 
assigned by the Distiict Director or Supervijor. Adjusters perform ad- 
justment work when notified by the Agent. The State Office in Columbus 
serves: Ohio, Indiana and Michigan. There are seven District Areas in 
the three States, and crop insurance is offered in eighty-three of the 
total of 262 counties in the three States. 



Following the visit to the Ohio State Office of the Federal Crop 
Insurance Corporation, the group travelled by bus and visited several 
farms in the State of Ohio. The first visit was to the farm of Mr. Paul 
Baughn, who appeared to be a typical farmer in Greene County, Ohio. 
Mr. Baughn operated a 160-acre farm and his crops for this year were: 

— 22 — 



62 acres of grain corn, 25 acres of soybean and 20 acres of wheat. Mr. 
Baughn had carried insurance for the past two years. He has never had 
a crop loss. He commented that in his opinion the main hazards to his 
crops were winter kiUing of fall wheat and poor quality in soybeans. 
It was his opinion that crop insurance should be carried by a farmer 
to protect the investment in the crop and also to protect him against 
unexpected disaster. He felt that crop insurance would be of consider- 
able assistance to a young farmer becoming established on a farm, as 
it would help him to secure the needed credit from banks, feed and 
fertilizer dealers, and elevators. 



The group then visited Mr. Rankin MacMillan, who also operates a 
farm in Greene County. This year Mr. MacMillan grew 85 acres of 
grain corn and 27 acres of winter wheat. Mr. MacMillan insures only 
his wheat crop, as he did not feel it would pay him to insure his corn 
crop, because he usually fertilizes his corn heavily and did not feel 
there was much chance of his yield falling below 60% of the long-term 
average for the area. He stated that he would be interested in insuring 
his corn crop if it could be insured on a "spot loss" basis, rather than 
on a "unit" basis, as is required by the Federal Crop Insurance Cor- 
poration. Mr. MacMillan has carried insurance for approximately 20 
years, and his only claim was in 1951. In his estimation, only approxi- 
mately 25% of the farmers in Greene County carry crop insurance of 
any kind, and many of these farmers, like himself, only carry insurance 
on one of several crops. It should be pointed out that in the United 
States, the acreage of wheat and tobacco grown by each individual farmer 
is under quota control by the Federal Department of Agriculture. 



The Committee also visited Mr. Edward Kaye of Highland County, 
Ohio; Mr. Robert Riddell of Pickaway County; Mr. Dwi:^ht Wills of 
Pickaway County; and Mr. Donald Schelling of Highland County. These 
farmers confirmed the previous opinions expressed to the Committee, 
and answered many questions presented by individual members of the 
Committee. 



On the evening of October 18th, the Committee travelled to Lansing, 
Michigan, and was received by Dr. N. P. Ralston, Director of Extension 
for Michigan State College, and Professor Robert J. Bevins of the Agricul- 
tural Economics Department. On October 19th, accompanied by Professor 

— 23 — 



Bevins the group made a tour of the State of Michigan and visited many 
typical Michigan farms. 



The first farm visited was Mr. C. Mann's in Shiawassee County. 
Mr. Mann last year grew 60 acres of white beans, 20 acres of winter 
wheat. Both crops were covered by Federal Crop Insurance. Mr. Mann 
stated that the reason he carried insurance was mainly to protect his 
investment and to have security and peace of mind. He estimated that 
approximately 10 years ago 4,000 farmers in his County carried Federal 
Crop Insurance, but now this figure had been reduced to approximately 
200. He stated that in his opinion the main reason why 3,800 farmers 
had discontinued this insurance was that the amount of coverage per- 
mitted under this plan was too small. The cost of producing all crops 
is going up each year, and the Federal Crop Insurance Corporation's 
insurance coverage is not. 



The Committee then visited Mr. J. Baungartner, also a farmer of 
Shiawassee County. Mr. Baungartner grows approximately 50 acres of 
beans, and he does not carry crop insurance of any kind. He stated that 
the reason for not carrying insurance was that he operates a well-drained 
farm and usually produces above average crops. He very seldom has 
a crop failure. For these reasons he does not feel it would pay him 
to carry crop insurance. He felt that he would be more interested in 
Federal Crop insurance, if he could purchase a higher amount of cover- 
age. He further commented that in his opinion a farmer relying on 
a single crop for his income is much more likely to be interested in crop 
insurance to protect his investment, than a farmer who grows diversi- 
fied crops. 



The Committee also visited Mr. Cecil of Shiawassee County, Haske 
Brothers of Tuscola County and Mr. W. Bootlets of Tuscola County. Of 
these farmers who grew considerable acreages of white beans as a "cash" 
crop, all except Mr. Bootlets carried insurance on their crops for hail 
only, through the Michigan Mutual Hail Insurance Company. Their com- 
ment was that in a poorer farming area where crop yields are not likely 
to be too high, the farmers use the Federal Crop Insurance Corporation. 
They estimated that approximately 75% of the farmers in their County 
carry hail insurance through the Michigan Mutual Company. It was also 
their opinion that on a well-drained and well-operated farm, hail was 
the only significant risk that would be encountered. 

— 24 — 



On the morning of October 20th, the Committee met with Dr. 
Ralston and Professor Bevins, Mr. R. L. Donovan, President, and Mr. F. 
M. Hector, Secretary of the Michigan Mutual Hail Insurance Company. 
Also present was Mr. William McGee of the Michigan State Insurance 
Commission. Mr. Hector and Mr. Donovan both addressed the group 
and provided considerable information regarding the administration and 
operation of the Michigan Mutual Company. In general, it appeared 
that the Company is in a sound financial condition and is doing a very 
good job of providing insurance coverage at minimum cost. The Company 
insures 75% of the farmers in the State of Michigan; the total cover- 
age of crops in that State is now over $20,000,000.00 and the premium 
on all crops insured is $12.00 per thousand. The Company employs 
approximately 280 licensed part-time agents. This Company now covers 
only the risk of hail, as they feel it would be too risky to cover other 
hazards and the premium would be more than the farmers could afford 
to pay. This Company insures all farm crops except fruit and onions. 
The Company did insure fruit but discontinued last year, because the 
risk required that the rates be too high for the farmer to carry. Last 
year they charged $50.00 per thousand for fruit coverage. They stated 
that there are now facilities for farmers growing fruit to obtain coverage 
from stock companies in Chicago, but very few farmers carry this insur- 
ance because of the high rates. 



In addition to the above activities, the Committee decided to meet 
and interview at first-hand a cross section of Ontario farmers, including 
both those producing insurable cash crops and those farmers who specialize 
in livestock production. Accordingly, meetings were arranged at Tillson- 
burg on October 26th and at Ridgetown on October 27th, 1980. 



On October 26th the Committee travelled to Tillsonburg, and attend- 
ed a meeting in the Town Hall. There were approximately 40 farmers, 
insurance agents and reporters in attendance. 



The Chairman explained the terms of reference under which the 
Committee had been appointed by the Ontario Legislature, and then 
requested the Secretary to outline the activities of the Committee to 
date, and to explain how the Federal Bill C-66 might apply to Ontario. 
The meeting was then thrown open and farmers were invited to present 
opinions and direct questions to the Committee. 

— 25 — 



In general, useful information was exchanged between the farmers 
present and the members of the Committee. It appeared that the farm- 
ers who specialized in tobacco were reasonably satisfied with the insur- 
ance coverage that they are now able to obtain from private companies. 
In addition, most of the farmers present were unanimous in their opinion 
that a Government Insurance Plan that would be operated under the 
provisions of the Federal Bill C-6o, would not be acceptable to them. 
They were satisfied that the amount of insurance coverage, which may 
not exceed 60% of the long-term average crop production for a specified 
area was definitely too low. In addition, they considered that an insur- 
ance plan suitable for a tobacco crop should be operated on a "spot loss" 
claim basis rather than on a "unit" basis. It was also indicated at this 
meeting, that hail, and to a much lesser extent early frost, are the only 
serious hazards that affect a tobacco crop. It was also brought out that 
the average coverage on an acre of tobacco was approximately $200.00 
to $300.00. The farmers agreed that the high premium rate was the 
reason for this limited coverage. 



On October 27th the Committee travelled to Ridgetown Agricul- 
tural School at Ridgetown. There were approxim.ately 35 farmers and 
a number of insurance agents from Kent and Essex Counties in attend- 
ance at this meeting. The Chairman explained the terms of Reference 
which had been laid down by the Legislative Assembly for Crop Insur- 
ance and stated that the Committee was not here to sell crop insurance, 
but was endeavouring to determine if the farm people of South Western 
Ontario were interested in crop insurance, especially a plan that might 
be sponsored by a Government Agency. 



Many of the farmers present directed questions to the Committee 
and much useful information was exchanged. One of the farmers from 
Essex County advised that private insurance companies now offered hail 
insurance coverage on all crops to farmers in his area. He estimated 
that these companies had this year written insurance to the amount of 
$250,000.00 on corn, wheat, soybeans and tomatoes. The premium rates 
for grain crops are approximately $1.00 per acre and on tomatoes ap- 
proximately $16.00 per acre, which covers the tomatoes up to $400.00 
per acre. It appears that the farmers in that area are reasonably satis- 
fied with the present hail insurance and that about 40% of the farmers 
in that area now carry hail insurance. 

— 26 — 



A delegation of the Kent County Fruit Growers' Co-Operative ex- 
pressed the opinion that the fruit growers of that area had a large amount 
of capital invested in their crops. The risks of damage from hail were 
substantial and they were definitely interested in crop insurance. 



They appreciated that hail insurance on fruit crops was available 
to them from private companies, but they felt that the average fruit 
grower could not afford to carry this insurance on account of the high 
cost. 



Representatives from Kent County Vegetable Growers' Marketing 
Association also presented several questions to the Committee and in- 
dicated that many vegetable farmers would be interested in a Govern- 
ment sponsored insurance plan. Many of the farmers present also ex- 
pressed the opinion that in general they would be more interested in 
a crop insurance plan that would provide higher coverage than that 
indicated by the Federal plan and that would also insure on a "spot loss" 
rather than on a "Unit" coverage basis. 



Correspondence was exchanged between the Committee and the 
Secretary of the British Columbia Fruit Growers' Mutual Hail Insurance 
Company regarding crop insurance on tree fruits in that province. The 
B.C.F.G. Association numbers about 3,500 members but of this number 
only about 1,500 are considered to be actively producing fruit in any 
quantity. The above Mutual Insurance Company has 1,800 actual share- 
holders and has had over 1,000 policy holders in some years. It is 
operated on a co-operative basis with share capital subscribed by the pur- 
chasers of insurance and hail is the only hazard covered. During its 
10 years of operation premiums have averaged approximately 5% of 
the risk covered and in only one year has an operating loss been re- 
corded. 



As a co-operative Company, refunds of part of the net profit have 
been made to policy holders during 6 of the 10 years of operation. 
These refunds varied from a high of 20% of the premiums to a low 
of 8% and they are made only on policies effective in the year of 
refund and on which no claim has been paid. The 1960 season has 
been the most successful to date and it is estimated that the refund 
will be shghtly in excess of 30%. 

— 27 — 



Tables "J", "K" and "L" provide detailed information on the oper- 
ation of this Mutual Insurance Company. 



Several farm organizations including the Federation of Agriculture 
for Ontario and the Statistics Division of the Farm Economics and Statis- 
tics Branch of the Ontario Department of Agriculture were contacted 
and requested to provide information regarding the annual losses that 
have been sustained in past years by the producers of agricultural crops 
in Ontario from each individual hazard. None of these sources was able 
to provide this information and the Committee is satisfied that it is not 
possible to obtain it at this time. 



— 28 — 



OBSERVATIONS AND CONCLUSIONS 



At the present time crop insurance is offered to Ontario farmers 
by a limited number of approximately 15 private insurance companies. 
The risks covered for tobacco are: hail, frost and wind. For crops other 
than tobacco hail is the only risk covered. Rates for crops, other than 
tobacco, for hail coverage only, range from $2.00 to $5.00 per $100.00 
coverage. There is no ''Set" maximum for insuring those other crops, 
the agent being requested only to insure for not more than the potential 
value of the crop concerned. 



Tobacco may be insured against hail, frost and wind. Rates for 
hail coverage vary from $6.00 to $14.00 per $100.00 coverage. The rate 
is determined by the history of the risk involved, on the particular area 
which usually resembles a township in size. The rates for frost and 
wind coverage vary from $4.00 to $10.00 per $100.00 coverage. There 
must be a minimum of 10% damage to the crop in each case, before 
the Company is liable for any claim. 



Coverage is available on an open basis, and is not selective as to 
risk within each designated area. For hail insurance coverage on tobacco 
there is no maximum liability per acre, although in general practice 
farmers do not usually insure for more than $250.00 per acre. It is 
probable that the amount of the premium is the main reason for this 
hmited coverage, as the actual value of the tobacco crop at marketing 
time may range from $500.00 to $1,000.00 per acre. It is estimated that 
approximately 90% of the tobacco farmers carry this hail insurance. 



Figures taken from the annual report of the Superintendent of 
Insurance for the Province of Ontario in 1960 establishes that over the 
past 5 years, 74.3% of the net premiums collected on crop insurance by 
private insurance companies has been paid out in damage claims (see 
Appendix "H"). The balance of 25.7% is used to cover the agent's 
commission, provincial premium tax, administration and profit, if any. 



Information provided by the Secretary Treasurer of the Ontario- 
Quebec Hail Association indicates that the administrative costs for all 
Companies would average approximately 15.8%. Since the Provincial 

— 29 — 



premium tax is 2% it follows that the agent's commission must average 
slightly under 10%. From the above figures it would appear that insur- 
ance agents, or these private insurance companies did not make excessive 
or even substantial profit on crop insurance in Ontario during that five- 
year period. 



Crop insurance, as offered in Ontario today by private companies is 
on a "spot loss" basis, and if more than 10% damage from the hazards 
covered occurs on one acre of crop, a claim results. 



Crop insurance as offered by the Manitoba plan and the Federal 
Crop Insurance Corporation of the United States, is on a "unit" basis. 
Under this method all acreage of one crop in which the insured has a 
100% interest, comprises one insurance unit. In general, under this 
method the loss must exceed 40% of the long-term average production 
of the whole unit, before a claim is valid. In other words, no "spot loss" 
claims are paid unless the total production of the whole unit has de- 
creased below the specified coverage. 



Submissions from various farmer groups have indicated that farmers, 
on the whole, are of the opinion that any participation in the crop insur- 
ance plan should be on a purely voluntary basis. It must also be individual 
participation and not an automatic participation by a grower group or 
association. 



The opinion was expressed several times by representatives of farm 
organizations that coverage for insurance purposes should be limited to 
natural hazards and should not cover anything over which the farmer 
himself has, or could have, even partial control. Many representatives 
of agricultural commodity groups before the Commission expressed con- 
cern and apprehension over the fact that under the Government sponsored 
plan some unscrupulous or dishonest participants might take an unfair 
advantage of the insurance agency and use it as a substitute for efficiency 
in farm practice and management. 



The apprehension that was expressed by some farmer groups in 

Ontario that an unscrupulous individual farmer might take advantage of 

a crop insurance plan, did not seem justified by the experience of the 

— 30 — 



Committee in Ohio. The fact that coverage was limited to 60% of the 
average long-term yields and the fact that the plan was administered in 
a very efficient manner and that the Corporation had the right to accept 
or reject an application for insurance seemed to preclude any one taking 
advantage in this way. 



The opinion was also expressed that under the insurance plan, 
even if damage to crops should appear early in the season, final settle- 
ment should be delayed until after harvest, as in many cases the crop 
makes a surprising recovery. This was demonstrated very clearly by 
the recovery made by some crops in Kent County, which were damaged 
by extensive rain in the month of June 1960, and subsequently recovered 
to produce satisfactory yields. 



It has also been established that under any plan studied, the cover- 
age on the crop concerned does not take effect until the day the crop 
is planted. One of the most serious hazards in Ontario is that the ex- 
cessive rainfall in the early Spring often prevents farmers from seeding 
a cash crop. It will be very difficult to protect them from this hazard 
in any insurance plan. 



In general, apart from the tobacco farms, Ontario farmers have 
not indicated that they are especially interested in all-risk crop insurance. 
This, in the opinion of the Committee, would also appear to be the case 
in the United States where although the Federal Crop Insurance Cor- 
poration has been operating for 20 years, only approximately 20% of 
the farmers in cash crop areas, visited by the Committee, participate in 
the Federal Insurance plan. 



Discussions with farmers in Ohio seemed to indicate that there 
was a slight adverse selection of risks operating in that State. This 
resulted from the reason that a good farmer who practised all up-to-date 
and efficient farming methods and used adequate and above the average 
amount of fertilizer, often felt that there was little likelihood of his crop 
yield falling below the 60% of the long-term average for that area. The 
average farmer who did not strive for higher yields was more hkely to 
take out crop insurance. 

— 31 — 



It appears that the "motive" which influenced most Ohio farmers 
to seek insurance coverage was security and protection of the income 
invested in the crop. Even well-to-do farmers who could afford to carry 
their own insurance were convinced that this was the main reason a 
farmer would participate in a crop insurance plan. 



It appears that the methods of reducing premiums, as employed by 
the Federal Crop Insurance Corporation in Ohio, such as "Early Pay- 
ment Discount" and 'Three-Years Good Experience Discount" are sound 
administrative practices and are instrumental in reducing overall costs. 



Although the Federal Crop Insurance Corporation has operated in 
the United States for 20 years, there is still only a very limited amount 
of coverage written on fruit and vegetable crops. This is in spite of 
the fact that several "Pilot" programs for these crops have been intro- 
duced in various States. For this reason, it would appear that it is 
extremely difficult to establish and properly administer a crop insur- 
ance program that would prove satisfactory to farmers growing fruit and 
vegetable crops. 



Some submissions to the Committee have suggested that insurance 
coverage for a crop should be based on the productive capacity of each 
individual farm, rather than on a local area as is now practised in Mani- 
toba and the United States. Evidence produced by officials in Ohio 
indicate that such a plan on an individual farm basis had been tried in 
that State and was not successful, as it did not seem possible to admin- 
ister it on a sound basis. 



Discussion with farmers in Ohio and Ontario has indicated that 
the existence of insurance coverage on crops and the availabality of in- 
surance for cash crops yet to be produced, might be an important factor 
in determining whether adequate credit would be made available to the 
farmer by a chartered bank, feed company or other credit facilities. This 
would apply especially to young farmers who are attempting to establish 
themselves on farms with limited capital available to them. 



It has been indicated that commercial firms, such as elevators, feed 
companies and banks, etc., would be pleased to see cash crop farmers 

— 32 — 



in general accept and use crop insurance as a method of stabilizing and 
protecting farm income and as a safe guard against unexpected crop 
losses. 



Fruit and Vegetable growers in the past have shown only slight 
interest in the crop insurance (hail) that has been made available to 
them by private companies. Most of the growers interviewed have 
never carried insurance and only a few have ever made concrete en- 
quiries. A few have taken out policies at one time or another, pri- 
marily against hail, but discontinued the practice either because they 
escaped hail and felt that the cost was too high, or because in their 
opinion they received too low a compensation when they did sustain a 
crop loss. 



Most fruit and vegetable growers accept the fact that over the years 
they are going to suffer losses of a greater or lesser degree from frost, 
wind, hail or other hazards. However, they anticipate that these losses 
usually will be to such a limited extent that they can cope with them. 
The diversity of crops grown by most Ontario Fruit and Vegetable grow- 
ers is another factor in their willingness to carry their own weather 
risks in the past. It would be difficult to evaluate and administer a 
crop insurance plan that would adequately cover the 40 different fruit 
and vegetable crops grown in Ontario. Much of the fruit is produced 
on trees, vines and canes. In some instances injury from adverse 
weather affects more than the current year's production. Injury to the 
plant itself may affect production for one or several succeeding crops, 
thus complicating the problems of calculating risks and making settle- 
ments. 



Growers who have had experience with crop insurance feel that 
the problem of reaching fair and equitable adjustments is one of the 
most difficult and most important aspects of a crop insurance plan. 
Growers of fruit and vegetable crops agree that hail, wind and unseason- 
able frost are the hazards that concern them most. Drought, excess 
rain and pests are of lesser importance. Increasing use of irrigation 
tends to offset the fear of drought. The risk of damage from excessive 
rainfall depends on surface and internal drainage of the soil and can 
be controlled to a certain extent by adequate tile drainage. In general, 

— 33 — 



insect pests, fungus and bacterial disease can be controlled by chemical 
sprays, dusts and good husbandry practices. 



As of this date, from representations made to the Committee, the 
Committee is of the opinion that crop insurance as provided under the 
Federal Act Bill C-66, in its present form, would not meet with general 
acceptance in the widely diversified conditions prevalent in the Agricul- 
tural industry of this Province. However, the Committee sensed, among 
the farmers contacted, a feeling of unwillingness to reject crop insurance 
because they felt there might be an element of value for credit purposes, 
and financial protection from hazards beyond their control, which they 
did not wish to forfeit. 



In this interim report, while general observations have been ex- 
pressed, the Committee does not feel that at the present time it is in a 
position to offer specific recommendations either for or against a Govern- 
ment sponsored crop insurance program. 



From the observations outlined it would appear that hail is the 
most significant hazard in the growing of cash crops in Ontario, especially 
Tobacco and Fruit crops. Farmers in Ontario now have an opportunity 
to purchase protection against the risk of hail from private insurance 
companies. In addition, the investigation of this Committee has estab- 
lished that in other areas. Mutual Hail Insurance Companies have been 
formed to provide a self-help program of insurance protection for mem- 
bers and other farmers who wished to participate. 



- 34 



APPENDIX ''B" 



LIST OF WITNESSES 



Mr. S. B. Williams, 

Director of Administration, 

Department of Agriculture, Ottawa. 

Mr. J. F. Grey ) 
Mr. S. S. Smith ) 

Ontario Tobacco Growers' Marketing Board. 

Mr. G. C. Nichols, 

Ontario Seed Corn Growers' Marketing Board. 

Mr. Murray McPhail, 

Ontario Elevators Association. 

Mr. A. H. Martin ) 
Mr. Morris Darling ) 

Ontario Soil & Crop Improvement Association. 

Mr. Kenneth E. Jones, 

Tobacco Insurance Agents of Ontario. 

Mr. Ernest Sheik, 

Anglo Canadian Fire and Insurance. 

Mr. Horace Johnson, 

Hail Insurance Underwriters' Association. 

Mr. C. M. Belyea ) 
Mr. Chas. Huffman ) 

Ontario Federation of Agriculture. 

Dr. H. C. Patterson, 

Ontario Department of Agriculture. 

Mr. Gordon Hill, 

Ontario Farmers' Union. 

Professor A. C. Robertson, 

Dept. of Agricultural Economics, O.A.C., Guelph. 

Dr. John F. Brown, 

Ontario Fruit & Vegetable Growers' Association. 

Mr. David McLaren ) 
Mr. C. N. Heath ) 

Ontario Flue-Cured Tobacco Marketing Board. 

— 35 — 



TABLE "C" 



THE FOLLOWING WERE CONTACTED BY THE COMMITTEE 

Agents General Insurance Company, 

Anglo-Canada Fire & General Insurance Co., 

Canadian Reinsurance Company, 

American Insurance Company, 

Continental Insurance Company, 

Federation Insurance of Canada, 

Gibraltar Insurance Company, 

Global General Insurance Company, 

Guarantee Co. of North America, 

Home Insurance Company, 

Niagara Fire Insurance Company, 

Phoenix of Hartford, 

Reliance of Canada, 

Simcoe & General Insurance Company, 

Tobacco Insurance Agents of Ontario, 

Ontario Asparagus Growers' Marketing Board, 

Ontario Bean Growers' Marketing Board, 

Ontario Berry Growers' Marketing Board, 

Ontario Grape Growers' Marketing Board, 

Ontario Tender Fruit Growers' Marketing Board, 

Ontario Fruit-for-Processing Co-Operative Limited, 

Ontario Seed Corn Growers' Marketing Board, 

Ontario Soya Bean Growers' Marketing Board, 

Ontario Sugar-Beet Growers' Marketing Board, 

Ontario Vegetable Growers' Marketing Board, 

Ontario Fresh-Peach Growers' Marketing Board, 

Ontario Flue-Cured Tobacco Growers' Marketing Board, 

Ontario Wheat Producers' Marketing Board, 

Ontario Farmers' Union, 

Ontario Federation of Agriculture 

Ontario Soil & Crop Improvement Association, 

Ontario Potato Growers' Association. 



— 36 — 



TABLE "D" 



ONTARIO PRODUCTION AND VALUE OF FIELD CROPS 
FOR YEARS 1958 AND 1959 









Yield 


Total 


Price 


Total 


Crop 


Year 


Acres Per Acre 


Production Per Unit 


Farm Value 






1 


iushels 


Bushels 


$ c 


$ 


Winter Wheat 


1958 
1959 


580,000 
425,000 


41.2 
29.3 


23,896,000 
12,464,200 


1.32 
1.56 


31,542,300 
19,383,100 


Spring Wheat 


1958 
1959 


15,000 
17,300 


24.2 
23.3 


363,000 
403,000 


1.38 
1.34 


501,000 
539,600 


Oats for grain & 
cut green 


1958 
1959 


1,900,000 
1,957,000 


55.2 
50.4 


104,880,000 
98,610,000 


.71 
.66 


74,646,800 
65,564,300 


Barley 


1958 
1959 


91,000 
100,000 


45.0 
40.7 


4,095,000 
4,068,200 


.98 
.97 


4,013,100 
3,930,700 


Rye 


1958 
1959 


92,000 
73,000 


25.6 
21.7 


2,355,000 
1,582,800 


.99 
1.00 


2,331,400 
1,580,500 


Flaxseed 


. 1958 
1959 


11,000 
11,500 


14.2 
14.5 


156,000 
166,300 


2.61 
2.90 


407,000 
482,700 


Mixed Grains 


1958 
1959 


760,000 
767,000 


55.6 
50.7 


42,256,000 
38,868,100 


.82 

.77 


34,649,900 
29,870,700 


Buckwheat 


1958 
1959 


27,000 
25,000 


23.2 
22.3 


626,000 
557,600 


1.02 
.99 


638,500 
554,700 


Corn for Husking 
(shelled) 


1958 
1959 


487,000 
480,000 


60.8 
64.1 


29,610,000 
30,756,500 


1.21 
1.04 


35,828,100 
31,860,700 


Peas, dry 


1958 
1959 


6,700 
7,000 


19.9 
19.6 


133,000 
137,400 


2.40 
2.46 


319,200 
337.700 


Beans (dry) 


1958 
1959 


65,500 
66,700 


21.3 
21.1 


1,395,000 
1,409,400 


3.65 
3.72 


5,091,800 
5,249,400 


Soybeans 


. 1958 
1959 


256,000 
248,000 


25.7 
27.4 


6,579,000 
6,783,100 


1.88 
1.84 


12,368,500 
12,482,300 


Field Roots 


1958 
1959 


15,000 
12,700 


469.0 
464.0 


7,035,000 
5,898,100 


.50 
.50 


3,517,500 
2,963,700 


Potatoes 


. 1958 
1959 


56,500 
53,000 


235.0 
210.8 


13,278,000 
11,172,400 


1.18 
1.45 


15,668,000 
16,235,400 


Fodder Corn 


1958 
1959 


285,000 
280,000 


10.74 
11.37 


3,061,000 
3,184,100 


4.35 
4.21 


13,315,000 
13,420,800 


Hay 


1958 
1959 


3,185,000 
3,300,000 


1.74 
2.01 


5,542,000 
6,630,000 


15.16 
13.86 


84,016,700 
91,893,800 


Sugar Beets 


1958 
1959 


31,600 
33,996 


15.27 
14.91 

Lbs 


482,600 
507,000 

Lbs 


13.62 
13.62 


6,573,000 
6,905,300 


Tobacco 


1958 
1959 


124,557 
118,407 


1,512 
1,301 


188,364,000 
154,000,200 


45.83 
52.94 


86,330,000 
81,535,400 


TOTAL 


1958 


7,988,857 


411,041,300 




1959 


7,975,603 








384,790,800 



— 37 — 



TABLE "D" — continued 

ESTIMATED PRODUCTION AND VALUE OF SPECIFIED COMMERCIAL 

FRUITS AND VEGETABLES IN ONTARIO FOR THE YEAR 1959 

FINAL ESTIMATE YEAR 1959 

Farm 

Total Total Selling Value Total 

COMMODITV^ Acres Production Per Unit Farm Value 

$ c $ 

bu. bu. 

Apples 24,089 4,603,100 1.07 4,942,300 

bu. bu. 

Cantaloupes 452 130,639 2.12 277,300 

bu. bu. 

Cherries, Sour 3,844 240,850 3.48 814,600 

bu. bu. 

Cherries, Sweet 1,757 176,400 5.57 982,100 

ton ton 

Grapes 20,449 35,872 94.64 3,395,000 

bu. bu. 

Peaches 13,855 2,143,300 2.08 4,454,800 

bu. bu. 

Pears 6,485 766,700 1.65 1,263,200 

bu. bu. 

Plums and Prunes 3,892 361,100 1.65 587,300 

Raspberries 1,790 2,364,600 .374 883,600 

Strawberries 4,283 6,188,i00 .227 1,408,600 

lbs. lb. 

Asparagus 2,849 6,071,500 17.80 1,078,800 

ton ton 

Beets 1,495 14,752 35.45 523,000 

ton ton 

Cabbage 2,773 30,528 32.49 991,800 

ton ton 

Carrots 3,871 49,589 35.39 1,754,800 

doz. doz. 

Cauliflower 1,122 364,878 1.37 500,900 

Celery 725 471,030 1.47 694,400 

doz. doz. 

Lettuce (Head) 2,073 1,797,250 .835 1,502,100 

bu. bu. 

Tomatoes (All) 32,833 10,995,200 1.283 13,847,200 

ton ton 

Canning Peas 17,292 101.75 1,759,395 

ton ton 

Canning Corn 70,095 26.08 1,828,391 

— 38 — 



TABLE "E" 

TOBACCO INSURANCE AGENTS OF ONTARIO 

TOBACCO HAIL RATES 1960 

AREA 10% Minimum 10% Deductible 

PER $100.00 COVERAGE 

Bayham 

Charlotteville 

Houghton 

North Walsingham 

South Walsingham 

Woodhouse $ 9.50 $ 8.00 

Dereham 

North Norwich 

South Norwich 

Middleton 

Townsend 

Windham 12.00 9.50 

Burford 

Brantford 

Dumfries 

Oakland 

County of Waterloo 

Blandford 

Blenheim 

Zorra 

Oxford (E. - W.) 14.00 11.00 

Malahide 

Yarmouth 

S. Dorchester 12.00 9.50 

Dunwich 

Aldboro 

Southwold 

Township of Zone 

County of Kent (excepting Twp. of Zone) 8.50 7.00 

County of Lambton 

County of Durham 

County of Middlesex 12.00 11.00 

County of Essex 7.50 6.00 

County of Durham 

County of Northumberland 10.00 8.00 

Townships in County of Simcoe: 

A — Adjala - Tecumseth 12.00 9.50 

B — Essa - Tossorontio 10.00 8.00 

C — Balance of County 7.50 6.00 

County of Bruce 8.50 7.00 

Balance of Province 7.50 6.00 

— 39 — 



TABLE "F' 



TOBACCO INSURANCE AGENTS OF ONTARIO 
TOBACCO, FROST & WIND RATES, 1960 



AREA 

Norfolk 10% minimum 

Elgin 10% minimum . 

Middlesex 10% minimum . 

Kent 10% minimum . 

Lambton 10% minimum . 

Essex 10% minimum . 

Durham 10% minimum . 

Oxford: 

South Norwich 10% minimum . 

Dereham 10% minimum . 

Blandford 10% deductible 

Blenheim 10% deductible 

Balance of County 10% deductible 

Brant - Burford 10% deductible 

Simcoe 10% deductible 

Bruce 10% deductible 



PER $100.00 COVERAGE 
$ 6.50 



6.50 
7.00 
4.00 
6.50 
4.00 
7.00 

7.00 

7.00 

10.00 

10.00 

7.50 

10.00 

10.00 

10.00 



OTHER CROPS — HAIL RATES 



Corn full cover 

Wheat full cover 

Oats full cover 

Barley full cover 

Mixed Grains full cover 

Rye full cover 

Buckwheat full cover 



$2.00 
2.00 
2.00 
2.00 
2.00 
2.00 
4.25 



Soya Beans fuU cover 
— 40 — 



Spelt fuUcover 4.25 

Flax fuUcover 5.00 

Peas full cover . 5.00 

Beans fuUcover . 5.00 

Turnips full cover 2.00 

Sugar Beets fuUcover .. 2.00 

Potatoes fuUcover 2.00 

2.00 



TABLE "G" 

CROP INSURANCE (FEDERAL) IN OHIO 

FOUR CROPS IN 1958 

COVERAGE PER ACRE 

NATIONAL OHIO 

CROP Low High Low High 

Wheat $ 765 $ 41.13 $ 18.40 $ 33.30 

Corn 12.00 44.00 31.00 40.00 

Soybeans 12.00 33.00 22.00 28.00 

Tobacco 140.00 505.00 324.00 362.00 

Source: Federal Crop Insurance Corporation and Ohio Crop Insurance 
Corporation Actuarial Divisions. 



FEDERAL ALL RISK PREMIUM RATES 

PER $100.00 COVERAGE 

IN OHIO IN 1958, 

AND U.S.A. 

NATIONAL OHIO 

CROP Low High Low High 

Wheat $ 2.35 $ 37.10 $ 2.45 ( .75) $ 6.00 (1.62) 

Corn 3.00 17.60 3.80 (1.18) 7.20 (2.59) 

Soybeans 4.60 12.50 5.80 (1.28) 11.60 (3.02) 

Tobacco 1.85 12.75 5.20(16.85) 5.50(19.90) 

Source: Ohio Crop Insurance Corporation Actuarial Divisions 
(Ohio figure in parenthesis is per acre rate). 

— 41 — 



TABLE "H" 

FEDERAL CROP INSURANCE EXPERIENCE FOR 

THE 10-YEAR PERIOD 1948-57, INCLUSIVE 

U. S. A. 

Surplus or 

CROP Premiums Indemnities Deficit ( — ) 

1. Exclusive of 14 "Dust Bowl" counties 
where insurance was discontinued. 

Wheat $ 102,306,066 $94,008,223 $ 8,297,843 

Cotton 17,451,684 18,157,418 —705,734 

Flax 7,517,809 5,815,376 1,702,433 

Tobacco 16,888,516 11,856,584 5,031,932 

Corn 13,505,637 16,881,703 —3,376,066 

Beans 1,394,461 1,719,492 325,031 

Multiple Crop 21,420,275 24,160,639 —2,740,364 

Citrus 601,290 388,355 212,935 

Soybeans 123,464 91,340 32,124 

Barley 291,698 107,333 184,365 

Peaches 37,400 22,000 15,400 



Total $ 181,538,300 $ 173,208,463 $ 8,329,837 



2. 14 "Dust Bowl" counties where 
insurance was discontinued. 

Wheat $ 7,414,766 $ 21,251,345 —$13,836,579 

Multiple Crop 1,432,893 5,888,178 —4,455,285 



Total 8,847,659 27,139,523 —18,291,864 



GRAND TOTAL $ 190,385,959 $ 200,347,986 —$9,962,027 

— 42 — 



TABLE "V 

CROP INSURANCE — RE HAIL — ONTARIO 1959 
As Reported In Annual Report Of The Superintendent Of Insurance 1960 



COMPANIES 



Net Premiums 
Written 



Agents General $ 32,254 

American Insurance 49,449 

Anglo Canada Fire & General 606,685 

Canadian Reinsurance 753 

Continental Insurance 11,640 

Federation Insurance 138,122 

Florists' Mutual 19,515 

Gibraltar Insurance Co 108,171 

Global Reinsurance 66,794 

Great Lakes Reinsurance 6,599 

Guarantee Co. of North America 106,907 

Home Insurance 106,352 

Lloyd's 44,929 

New York Fire 8,508 

Niagara Fire 59,869 

North American Reinsurance 29,380 

Phoenix of Hartford 76,931 

Reliance Insurance of Canada 27,654 

Simcoe & Erie Gen. Insurance Co. 15,725 

Upper Canada Insurance 45,509 

Connecticut Fire (unlicensed) 22,584 
Equitable Fire & Marine (unlicensed) 4,517 



Net Losses 
Incurred 

$ 18,489 

44,965 

458,108 

456 

672 

81,172 

1,248 

69,670 

49,304 

4,253 

78,802 

70,633 



8,902 
53,557 
17,769 
74,491 
26,777 
90,748 
33,031 
21,868 

4,374 



Totals for 1959 $ 1,588,847 $ 1,209,289 

Totals for 1958 1,698,333 482,967 

Totals for 1957 1,454,760 1,863,642 

Totals for 1956 1,335,357 1,535,817 

Totals for 1955 1,092,504 237,468 

TOTALS — 5 years $7,169,801 $5,329,183 

— 43 — 



Ratio 

Net Losses 

Insured To 

Net Premiums 

Written 

57.3 
90.9 
75.5 
60.6 

5.8 
58.8 

6.4 
64.4 
73.8 
64.4 
73.7 
66.4 



104.6 
89.5 
60.5 
96.8 
96.8 

577.1 
72.6 
96.8 
96.8 



76.1 

28.4 

128.1 

115.0 

21.7 



74.3 



TABLE ''J" 

SUMMARY OF WEATHER LOSSES TO CROPS REPORTED BY 

238 FARMERS IN DOVER AND CHATHAM TOWNSHIPS, 

JUNE 11th- 18th, 1960 



fli o t; -4-> 

Winter Wheat 82 

Barley 40 

Oats 56 

Soyabeans 85 

White Beans 52 

Grain Corn 167 

Canning Corn 19 
Sugar Beets 48 

Canning Peas 23 
Canning Tomatoes 25 
Pumpkins 3 



f crop 
[y seeded 
crop by 

who 
[ loss 


COMPLETE LOSS 
AND NOT RE-SF.KDED 


PARTIAL LOSS 
AND NOT RE-SEEDED 

40% Loss and Over 


Acres o 
original! 
to this 
farmers 
suffered 






cow 




ll 


row 


1,907 


18 


73 


4,296 


45 


667 


19,133 


1,083 


13 


97 


6,276 


18 


215 


7,137 


882 


14 


48 


3,131 


39 


368 


8,268 


2,502 


22 


144 


9,000 


48 


865 


28,036 


1,420 


12 


41 


3,282 


16 


154 


7,851 


7,179 


57 


388 


27,655 


71 


1,120 


46,797 


287 


7 


18 


1,920 


5 


41 


2,445 


901 


10 


25 


2,610 


7 


42 


4,264 


361 


12 


103 


14,725 


11 


29 


10,900 


268 


10 


29 


9,050 


10 


37 


7,400 


35 


1 


1 


150 









44 — 



TABLE "J" 

SUMMARY OF WEATHER LOSSES TO CROPS REPORTED BY 

238 FARMERS IN DOVER AND CHATHAM TOWNSHIPS, 

JUNE 11th -18th, 1960 

DAMAGED & RE-SEEDED TO 



PARTIAL LOSS 
AND NOT RE-SEEDED 




SAME OR ANOTHER CROP 










Less than 409'c Loss 


ANTICIPATED LOSS 
40% and Over 


ANTICIPATED LOSS 
Less than 40% 


$«« 


J« 


^ 






-a 


IS 




1 




1^ 




ll 


^5 


i 


25 


424 


5,272 


3 


50 


1,690 


4 


48 


435 


25,119 


5,707 


30,826 


10 


201 


2,225 


5 


50 


1,380 


1 


20 


250 


14,793 


2,475 


17,268 


10 


115 


1,127 


5 


52 


1,215 


1 


10 


100 


12,614 


1,227 


13,841 


15 


252 


3,790 


24 


615 


17,336 


4 


64 


1462 


54,372 


5,252 


59,624 


7 


89 


3,167 


13 


180 


8,700 


19 


400 


7648 


19,833 


10,815 


30,648 


55 


1469 


25,966 


26 


491 


23,075 


10 


213 


3220 


97,527 


29,186 


126,713 


11 


100 


4,480 








1 


9 


90 


4,365 


4,570 


8,935 


30 


331 


10,256 


9 


86 


8,595 


6 


59 


1290 


15,469 


11,546 


27,015 


4 


149 


2,460 


2 


30 


2,190 


1 


14 


200 


27,815 


2,660 


30,475 


8 


44 


4,015 


2 


22 


6,500 


3 


17 


847 


22,950 


4,862 


27,812 


3 


34 


1,170 














150 


1,170 


1,320 



$295,007 $79,470 $374,477 



Loss on Crops not listed on schedules: Popcorn $350; 
Tobacco $4,750; Hay $1,930; Red Beets $2,500; 
Cucumbers $670; Strawberries $60 



$ 10,260 



$ 384,737 



No. of Farms — 238 



Average Loss Per Farm — $1,616.54 



45 



TABLE "K'* 



B.C. F.G. MUTUAL HAIL INSURANCE CO. 
PREMIUMS AND LOSSES 



Year Risk 

1950 $ 600,571. 

1951 526,829. 

1952 1,427,094. 

1953 3,290,010. 

1954 4,376,158. 

1955 5,859,666. 

1956 3,885,307. 

1957 4,902,380. 

1958 4,730,296. 

1959 3,436,522. 

1960 3,752,230. 



Premium 


Claims 


32,610. 


$ 16,973. 


25,954. 


2,903. 


70,460. 


17,218. 


115,126. 


181,179. 


149,764. 


64,458 


191,288. 


188,581 


126,175. 


68,372 


159,272. 


57,084 


154,319. 


115,533 


125,522. 


51,663 


147,468. 


18,412 



46 — 



TABLE "L" 

B. C. F. G. MUTUAL HAIL INSURANCE COMPANY 

BALANCE SHEET 

As Of December 31st, 1959 



ASSETS 

CURRENT: 

Cash on hand and in bank (after providing for 

outstanding cheques) $ 15,148.48 

Accounts receivable 653.25 

Accrued interest on investments 335.09 

$ 16,136.82 

INVESTMENTS: (at cost, par value $75,025.00) 

On deposit with Minister of Finance 4,950.00 

Other 68,644.45 

73,594.45 

$ 89,731.27 

LIABILITIES 

CAPITAL AND RESERVE: 

Capital: 

Authorized 

5,000 shares of guaranteed stock with 

a par value of $10.00 each $ 50,000.00 

Issued and fully paid for: 

1,870 shares of $10.00 each 18,700.00 

General Reserve: 

Balance as at Dec. 31st, 1958 $ 50,026.75 

Add: Transferred from net profit 

for the year ended Dec. 31st, 

1959 (Statement "B") 21,004.52 

71,031.27 

Statement "A" $ 89,731.27 



$ 89,731.27 

— 47 — 



TABLE "M" 

B. C. F.G. MUTUAL HAIL INSURANCE COMPANY 

REVENUE AND EXPENDITURE STATEMENT 

FOR THE YEAR ENDED DEC. 31st, 1959 



REVENUE 

Premiums earned $125,521.64 

Investment Income 1,466.00 

$126,987.64 

EXPENDITURES: 

Claims $ 51,663.03 

Reinsurance premiums 12,500.00 

Adjusting expense 

— Fruit Growers Mutual 

Insurance Company $5,036.84 

— Other 43.75 

5,080.59 

Bad Debts 384.97 

Operating fee charged by Fruit Growers' 

Mutual Insurance Co. per contract 18,828.25 

88,456.84 

NET PROFIT FOR THE YEAR 

ENDED DECEMBER 31st, 1959 $ 38,530.80 



ALLOCATION OF PROFIT: 

General Reserve $ 21,004.52 

Paid to members as refund 

(15.51% of 1959 eligible premiums) 17,526.28 

STATEMENT "B" $ 38,530.80 

— 48 — 




i. i 



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i 



s.'